In an interview with Risk Desk editor-in-chief John Sodergreen, Acting CFTC Chair J. Christopher Giancarlo expressed "his views on market growth, killing bad policy and rules, staffing the agency, fintech, matters of market jurisdiction and his relationship with FERC," among other topics.
During the broad-ranging discussion, Acting Chair Giancarlo stated that he would apply the alternative swaps regime introduced by his January 29, 2015 White Paper in order to establish that the "execution of swaps transactions should be a licensed endeavor, but the government should not dictate the business model of these enterprises." Citing the SEC broker-dealer model, he asserted that the CFTC should demand only "high standards" from Swap Execution Facilities. Acting Chair Giancarlo also highlighted customer choice in trade execution as a priority that is "high on the list."
As to the Financial Choice Act drafted by Financial Services Committee Chair Representative Jeb Hensarling, Acting Chair Giancarlo argued that "Congress got Title VII right," since Congress "adopted reforms to the market that were already underway in the marketplace," such as an industry movement toward clearing and swaps reporting. That said, he concluded:
"[A]s a constitutionalist, I believe it's not for an independent agency to tell Congress what the law is; rather [it's] for us to follow the law."
Regarding proposed Regulation Automated Trading, Acting Chair Giancarlo asserted that Congress should determine whether to grant the CFTC access to source codes. Regarding enforcement, he said he would use "disciplined aggression" and examine whether certain cases should be brought by self-regulatory organizations. Regarding energy policy, he indicated that he will have CFTC staff determine five areas of regulatory overlap between the SEC and FERC, and "divvy it all up" between agency heads.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.